Resident retention is a particularly challenging facet of student housing. This is largely due to the renting tendencies of students, who are often considered as transient renters. What we mean by transient renters is that they frequently change their living accommodations over the course of their academic careers. This can be rather taxing to landlords and property managers, as low renewal rates create the constant need to find replacement tenants. But what if there was a simple way to boost lease renewals?

Renewal incentives are incredibly easy to implement and often aren’t particularly costly; yet surprisingly, they aren’t very common in the student housing sector. In many cases, renewal incentives can help boost lease renewal rates and can also increase tenant satisfaction.

A survey was conducted by The Rent Roll, which contains valuable information about what types of incentives are preferred. Some of the key findings were:

• Rent discounts were the most widely preferred monetary incentive.
• Covered parking facilities and gym memberships were the most preferred non-monetary incentives.
• The best time to offer incentives was during the lease signing or right before a tenant’s lease expires.

Furthermore, the survey listed four key types of incentives and asked respondents their preferred type:

• Monetary – 52%
• Unit Upgrade – 27%
• Free Service – 11%
• Household Item – 11%

Without a doubt, monetary incentives hold the most weight. The survey went on to detail what types of monetary incentives were most preferred:

• Discount on rent – 58%
• Cash – 28%
• Security deposit rebate – 10%
• Gift card to a popular retailer – 4%

One thing worth noting is that the survey broke down preferences by age groups. For student housing, the focus group would be the 18 – 25 age bracket, where 29% reported preferring discounted rent and 17% reported cash.

As for non-monetary incentives, when it came to unit upgrades the preferences were:

• New carpet/flooring – 31%
• Washer/dryer – 30%
• Kitchen appliances – 30%
• New wall paint – 8%

By piecing all of this information together, student housing landlords and property managers can identify what type of renewal incentives will be most successful with their student demographic. Retaining residents is far more cost-effective than constantly replacing tenants; which is why it makes sense to try and motivate current residents to stay.

Student housing landlords and property managers can focus on offering either rent discounts for lease renewals in advance (or extended lease agreements), or alternatively cash bonuses. These two options hold the greatest weight in terms of motivation for renters aged 18 – 25. Non-monetary incentives are less likely to encourage younger student renters to resign.

Lastly, it’s important to keep in mind that low lease renewal rates can be symptomatic of a broader problem, which may not be resolved solely through offering renewal incentives. However, in many cases within student housing, lease renewal rates can be improved by taking a more proactive approach and utilizing incentives to increase a tenant’s motivation to stay longer.

The full survey and report by The Rent Roll.